HF 2296 (LSB 5888YH (2) 86)

HOUSE FILE 2296

BY  BYRNES

A BILL FOR

An Act  imposing a fee on certain fertilizers to be credited to the water quality initiative fund. 
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 200.8, subsection 4, Code 2016, is amended to read as follows:
   4.  In addition to the fees imposed under subsection 1, a groundwater protection fee and water quality initiative fee shall be imposed upon nitrogen-based fertilizer. The Each fee shall be based upon the percentage of actual nitrogen contained in the product. An eighty-two percent nitrogen solution shall be taxed at a rate of seventy-five cents per ton. Other nitrogen-based product formulations shall be taxed on the percentage of actual nitrogen contained in the formulations with the eighty-two percent nitrogen solution serving as the base. The Each fee shall be paid to the secretary by each a licensee registering to sell fertilizer to the secretary of agriculture pursuant to section 200.5. The fees collected by the secretary under this subsection shall be deposited in the agriculture management account of credited to the groundwater protection fund or the water quality initiative fund in the manner described in section 200.9. The secretary of agriculture shall adopt rules for the payment, filing, and collection of groundwater protection the fees from paid by licensees in conjunction with the collection of registration and inspection fees paid by persons under subsection 1. The secretary shall, by rule, allow an exemption to from the payment of this fee the groundwater protection fee and water quality initiative fee for fertilizers which contain trace amounts of nitrogen.
    Sec. 2.  Section 200.9, Code 2016, is amended to read as follows:
   200.9  Fertilizer Use of fees.
   1.  Fees collected by the secretary for licenses and inspection fees under sections 200.4 and 200.8, with the exception of those fees collected for deposit in the agriculture management account of the groundwater protection fund, shall be deposited in the general fund of the state and shall be subject to the requirements of section 8.60. Moneys deposited under this section to the general fund shall be used only by the department secretary for the purpose of inspection, sampling, analysis, preparation, and publishing of reports and other expenses necessary for administration of this chapter. The secretary may assign allocate moneys to the Iowa agricultural experiment station for research, work projects, and investigations as needed for the specific purpose of improving the regulatory functions for enforcement of this chapter.
   2.  Notwithstanding subsection 1, the groundwater protection fee collected by the secretary pursuant to section 200.8, subsection 4, shall be credited to the agriculture management account of the groundwater protection fund created pursuant to section 455E.11, subsection 2, paragraph “b”. The water quality initiative fee collected by the secretary pursuant to section 200.8, subsection 4, shall be credited to the water quality initiative fund created pursuant to section 466B.45.
EXPLANATION
The inclusion of this explanation does not constitute agreement with

the explanation’s substance by the members of the general assembly.
   BILL. This bill provides that the groundwater protection fee imposed on the sale of nitrogen-based fertilizer and credited to the agriculture management account of the groundwater protection fund would have a counterpart (water quality initiative fee). The new fee would be imposed on the same basis as the groundwater protection fee but would be credited to the water quality initiative fund.
   BACKGROUND —— FEES ON FERTILIZERS AND SOIL CONDITIONERS. Each brand and grade of a commercial fertilizer or soil conditioner must be registered with the department of agriculture and land stewardship headed by the secretary of agriculture (secretary) (Code section 200.5). A person who is engaged in the manufacture or sale of fertilizers and soil conditioners must obtain an annual license, register each fertilizer or soil conditioner, and pay the associated fees which are collected by the secretary (Code sections 200.4(1) and 200.8(1)) and deposited into the general fund of the state but are reserved for use by the secretary in administering and enforcing regulations applying to fertilizers and soil conditioners (Code sections 8.60 and 200.9). In addition to fees reserved for use by the secretary, a nitrogen-based fertilizer fee (groundwater protection fee) is required to be paid by each licensee registering to sell fertilizer in this state. Those fees are credited to the agriculture management account of the groundwater protection fund to support projects and programs designed to protect groundwater resources (Code sections 200.9 and 455E.11(2)(b)).
   BACKGROUND —— WATER QUALITY INITIATIVE FUND. The water quality initiative fund is created in the state treasury under the management of the soil conservation and water quality division of the department (Code section 466B.45). The purpose of the initiative fund is to support and administer projects to reduce nutrients in surface waters from nonpoint sources in a scientific, reasonable, and cost-effective manner (Code section 466B.42).